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Canadian Gov't Keeping Options Open On Digital Taxation

by Mike Godfrey, Tax-news.com, Washington

18 October 2016


Canadian Heritage Minister Melanie Joly has said that she will discuss with the Finance Minister the potential application of a sales tax to foreign online services operating in the country.

During an interview with CTV News, Joly was asked whether the Government would force companies such as Netflix to pay into the Canada Media Fund that contributes to the production of Canadian content. She responded: "There will be no Netflix tax. This is a broader question: it's about the participation of digital platforms to the system."

In September, Joly launched a consultation on "Canadian Content in a Digital World." Commenting on the consultation, Joly told CTV that the Government was "looking at all scenarios – certainly we want to engage with different digital platforms in the conversation and how they can support Canadian content."

Pressed as to whether the Government could apply a sales tax for foreign online services operating in Canada, Joly replied that "this is a conversation of course that I will be having with the Minister of Finance Bill Morneau regarding sales tax." She did however emphasize that this issue was "not necessarily under the purview of Canadian heritage – it's much more under the purview of my colleague."

When asked to confirm if the only option she was ruling out was a "Netflix tax," Joly said the Government was "willing to have a conversation with digital platforms."

TAGS: tax | value added tax (VAT) | sales tax | goods and services tax (GST) | cultural heritage | Canada | tax reform | services

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